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Sprint and T-Mobile merger faces lawsuit from 10 states: 'Bigger isn't always better'

Kevin Hardy and Steve Vockrodt, The Kansas City Star on

Published in Business News

Attorneys general from 10 states are suing to block Sprint's proposed merger with T-Mobile.

New York Attorney General Letitia James, who is leading the multistate effort, filed a civil antitrust lawsuit Tuesday in New York federal court. She was joined by peers in California, Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin.

Sprint officials could not immediately be reached for comment Tuesday.

In the court filing, James argued the merger would be bad for consumers by limiting wireless competition.

"When it comes to corporate power, bigger isn't always better," James said in a statement. "The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country."

Sprint and T-Mobile announced their plans to merge a year ago in what would be a $26 billion deal.

 

It was the second time the two companies contemplated a tie-up. Sprint and T-Mobile considered a merger in 2014 but ditched the effort when they believed it would face antitrust headwinds from federal regulators. T-Mobile and Sprint are the third and fourth largest, respectively, of the four major wireless carriers.

In the renewed push for a merger, both companies have said the new T-Mobile could deploy a fifth generation, or 5G, wireless network that would allow for ultra-fast download speeds for customers.

They also promised that they could keep rates for customers low and grow jobs under the combined company. The combined company would keep its primary headquarters in suburban Seattle while maintaining a secondary headquarters in Overland Park, where Sprint currently operates on a sprawling corporate campus. Sprint employs about 6,000 people in the Kansas City area.

Another 2,000 contractors work at the Sprint campus.

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